Coconut Oil: FSA Eligibility

Coconut Oil: reimbursement is not eligible with a Flexible Savings Account (FSA)
Coconut oil is used primarily for cosmetic purposes, therefore it is not eligible for reimbursement with a flexible spending account (FSA), health savings account (HSA), health reimbursement arrangement (HRA), limited care flexible spending account (LCFSA) or a dependent care flexible spending account (DCFSA).

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What is coconut oil?

Coconut oil, also commonly referred to as copra oil, is a type of edible oil that is derived from the kernel or meat of coconuts harvested from a coconut palm tree, and is produced through either a dry or wet manufacturing process that extracts the oil from the coconut components so it can be used for further applications. While coconut oil is edible, it is extremely high in saturated fat and numerous international health organizations advise against regular consumption of coconut oil (Medical News Today).

In recent decades, coconut oil has emerged as a popular ingredient in the health and beauty fields. In particular, coconut oil is an emollient that acts as an effective moisturizer on all types of skin, and some believe it can play a role in delaying the appearance of fine lines and wrinkles. Coconut oil is also a popular hair care product, as it assists in the healthy growth of hair and can produce a shiny quality as well.

In the medical realm, coconut oil users contend that the product can be helpful in treating diabetes, heart disease, chronic fatigue, Crohn's disease, irritable bowel syndrome (IBS), Alzheimer's disease and as a means of boosting the immune system. However, coconut oil is considered to be an alternative treatment for these conditions and is not considered a mainstream medical solution to these ailments.

Why isn't coconut oil eligible for reimbursement?

Coconut oil is primarily used in a variety of cosmetic applications and its primary purpose exists as a beauty product and not a viable medical treatment. Per IRS 213(d): "medical care includes amounts paid for the diagnosis, cure, mitigation, treatment, or prevention of disease, or for the purpose of affecting any structure or function of the body." This includes medical equipment, supplies and devices. Coconut oil's primary purpose is health and beauty; therefore it is not eligible for reimbursement with a consumer directed healthcare account.